Lee Daniels and Damon Dash Settle $2 Million Lawsuit

Lee Daniels is a man of his word — he told us he would make things right with Damon Dash — and now he has … reaching a settlement in their lawsuit over a $2 million movie investment.

According to docs, obtained by TMZ, both sides agreed to drop the matter and each will pay their own attorney’s fees. As we first reported … Dame was livid about the cash he’d given Lee to make a couple of movies. In fact, he got in Lee’s face during a Diana Ross concert earlier this year … demanding the dough.

Lee made it clear to us … he’d settle the debt, and thanked Dame for supporting his projects when no one else in Hollywood would.

The docs don’t reveal any financial details … but based onLee’s own words, it’s a good bet he forked a hefty chunk of change to Dame.